ByKate Kelly, CNBC ReporterJune 30, 2011

A Zynga worker puts up a job sign at Zynga headquarters in San Francisco June 2, 2011. The social gaming company is planning to sell $1.5 billion to $2 billion of its shares to the public later this year.

The game maker, which wants to raise between $1.5 billion and $2 billion as part of the IPO, according to one of these people, has selected Morgan Stanley to lead the deal. Goldman Sachs, which had been rumored to be in the lead spot just a few weeks ago, will instead be in the number 2 position, these people added.

The expected Zynga IPO—which could come early this fall, on the heels of a midsummer SEC filing—marks another milestone in what is shaping up to be a euphoric period for Internet new issues.

Last month the job-networking site LinkedInlaunched an IPOreminiscent of the heady days of the late 1990s, complete with a triple-digit first-day price pop and voluminous share turnover.

A few weeks laterPandora Media, the online radio company, priced high above its intended initial stock price and saw that price rise dramatically in aftermarket trading—only to fall beneath that level in the weeks that followed.

But the Zynga offering is likely to be notable for other reasons too. For one, the size of its IPO could imply a lofty valuation of $15 billion to $20 billion or more, assuming the game company follows the increasingly-popular low-float model, in which companies sell only 10 percent or so of their shares to the public—partly in hopes of driving up their valuation.

For another, Zynga is now wrapping up discussions with banks about raising a debt facility of at least $1 billion, according to people familiar with the matter, a move that will no doubt prompt questions about why it needs the extra cash and whether its underwriters were expected to write loan checks in order to get in on the IPO.

For Pincus, hiring firms like Morgan Stanley and Goldman Sachs is a sharp turnaround from the position he was in after business school.

In a recent interview, he told Vanity Fair that his lack of “respect for authority” caused him to bomb his interviews for banking jobs as an HBS student. “Even if I’d wanted to work at Goldman Sachs, they weren’t going to hire me, because I was saying things like ‘That’s a dumb question’ when I was asked something stupid in the interviews,” he recalled.

Still, after many of his friends eventually landed at hedge funds or investment banks, Pincus felt “washed up,” he added. Now 45, and running one of the most sought-after technology clients in Northern California, he’s calling a lot more shots.